A Thomson Reuters report finds that legal operations teams are now a hallmark of over half of corporate legal departments.

Legal department operations teams are not a particularly new entity in corporate legal departments, but in the last few years they've crossed the threshold into a household fixture as a means to curb costs and infuse more business-like structures into in-house legal work.

Thomson Reuters Legal Tracker, the company's e-billing offering, recently published its first Legal Department Operations (LDO) Index Benchmarking and Trends Report to give law departments and their operations teams a sense of the current outlook of legal operations work. The report found that 51 percent of legal departments now have dedicated legal operations staff.

Carly Toward, director of business operations for Thomson Reuters Legal Enterprise Solutions, said the report indicates that legal operations has matured over the last few years, moving from a cutting-edge idea for a department to a fairly commonplace one.

“We're now at that tipping point where more organizations than not have dedicated legal operations functions. If you look back a few years ago, you definitely didn't see that. It was definitely a growing trend, but it wasn't formalized,” she said.

Legal operations teams are typically charged with keeping legal departments honest about their spending and efficiency. This work may take on a new tenor in light of the report's finding that 62 percent of legal departments report an increase in the volume of legal matters across the board.

Toward finds that corporate legal departments tend to manage volume in one of three ways: boosting their outside counsel investments, doubling down on their legal operations personnel, and increasing their technology spending.

The benchmarking report found that many legal departments looked to their technology spend to boost efficiency, but not uniformly. 18 percent of legal departments increased their technology spending, but 12 percent decreased their technology spending.

Additionally, the report aimed to help legal departments self-diagnose their level of operational sophistication as measured by the ways they use their e-billing systems to organize matters, track spending and create predictive data. Of those polled, 58 percent defined themselves as “proactive,” using billing guidelines, invoice audits and legal bill review, and maintaining a process for managing timekeeping. Meanwhile, 21 percent self-defined as “reactive,” using e-billing systems with basic spending reports, and only 7 percent self-defined as “predictive,” meaning they use budget data to forecast matter costs.

“The better organizations get at setting budgets and really using and understanding their budget data, that's where they can start to be more predictive about where the trends are going,” Toward said of these benchmarking findings. “There's a lot of data at their fingertips. The real question is, how can they use that data to be predictive?”

Additionally, Toward noted that when organizations were able to self-classify as “predictive” in their level of billing sophistication, they typically had legal operations teams to analyze data and generate insight reports.

“Organizations who were predictive, they had more legal operations staff, but the activities they were undertaking were different reports to show efficiency. They were using the technology to report on why and how they were more efficient,”

The report surveyed legal departments about their last six months, and it is intended to be published semi-annually to give organizations benchmarking data “to get things changing within a year,” according to Toward. The report surveyed 161 legal departments.

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